How do I explain to my fiance that I have pearly penile papules?

Reassurance. I think you can reassure your partner that the condition is completely common and benign. If, however, you have lesions of the penis they appear to be changing in character or become painful, then you should have further evaluation.
Education. Pearly penile papules (ppp) are considered a normal variant. They are not contracted or spread through sexual activity. Ppp are seen more frequently in uncircumcised men. What causes ppp to develop are not known. You should take her with you to your dermatologist, as this may help her better understand. Also there are surgical treatments available to help remove ppp. Hope this helps.